Quantum Bridge files for $115 million IPO

Quantum Bridge Communications, an optical networking equipment maker, on
Tuesday announced plans for a $115 million initial public stock offering.

The offering size and the estimated price range of the common-stock IPO have not been set.

With the IPO filing, Quantum
Bridge becomes the latest networking company vying to go public; other companies to file recently have included Tellium, Zhone Technologies and Convergent Networks. Networking and optical equipment IPOs remained strong through the summer, even when other technology stocks suffered.

But the communications downturn, particularly a shortage of investment capital, has raised serious questions about whether decreased capital spending by carriers will harm many of the equipment start-ups that supply them.

Quantum Bridge is one of many companies addressing the so-called last mile of the network. The company's fiber-optic gear links businesses and office parks with the public Internet and high-speed nationwide backbones, allowing carriers to provide business customers with greater bandwidth. Competitors include eLuminant, a subsidiary of NEC; Paceon, a subsidiary of Mitsubishi Electric; Terawave; and CS Communication & Systemes.

Quantum Bridge primarily sells its equipment via a direct sales force. Its two initial customers are Comcast Business Communications and Advanced TelCom Group, which account for all of the company's revenue.

Quantum Bridge posted a net loss of $7.6 million, or $2.94 per share, on no revenue for the 1999 fiscal year. For the nine months ended Sept. 30, the company reported a net loss of $29.4 million, or $5.70 per share, on revenue of $654,000.

The company said it had nearly $35 million in cash on hand as of September. Quantum Bridge expects its existing cash, plus the proceeds from the proposed IPO, to fund operations for 12 months after the offering. It said that it also may need to seek additional financing. Quantum Bridge secured $102 million in third-round funding in April.

The Andover, Mass.-based company plans to trade on the Nasdaq National Market under the "QBCI" ticker symbol.

Investment bank Morgan Stanley Dean Witter will serve as the lead underwriter, and J.P. Morgan, Robertson Stephens, UBS Warburg and Lazard Freres will co-manage the offering.